The Internet has changed so much in our real estate industry. But on the residential side of the business, the changes have definitely been much more profound. Having one's own agent website, locating prospects through the Web, closing transactions by utilizing automatic email "drip" message campaigns for both client and prospect follow-up, and having downloadable forms and information packages on one's website are all very much the norm on the residential side of the business.

But on the commercial side, it's still very rare to find an agent who employs any of these approaches in his or her own real estate business. While this general lack of technology on the commercial side of the industry is surprising, it may also prove to be the industry's saving grace.

Residential agents have done an outstanding job of making information available on the Internet; unfortunately this accomplishment is now being used against them. Home buyers and home sellers can easily find information on most every home available in their area, and discount brokerage companies are using this ease of access to drive commission rates down.

In addition, the public now expects agents to continue providing this information on the Internet for free.

Basically what has happened here is you have hundreds of thousands of real estate agents continually inputting data into the system to make it work, while others are primarily using the system to reduce the commissions that these agents get paid.

As a real estate agent, how does this make you feel?

About ten years ago, when I was managing a real estate office for Lee & Associates Commercial Real Estate Services, the company employed an executive by the name of Jesse Harrill. Jesse was a very bright man when it came to both information systems and their applications in corporate America. And at one time, he was even in charge of the most powerful computer in the world operated by the Department of Defense. But with regard to data and information systems in the business world, Jesse would often say something like this: "Don't ever give away your data. Once you give away your data, you risk losing complete control of your business."

Truer, more prophetic words have rarely ever been spoken in our industry.

With all the data being continuously supplied online by hard working real estate agents, others are seizing the information and using it against the agents themselves. But what's interesting, since the commercial side of the business is much more fragmented in its dissemination of online listings, is the fact that this information is more difficult to use against commercial agents to drive down their commissions.

Discount commission companies in the real estate industry can really thrive when they have streamlined access to a very efficient multiple listing service, but if they had to employ people to keep listing information current on an ongoing basis instead, this would make it more difficult for them to consider even entering the brokerage arena at all. (And yes, I've been approached by people wanting to discuss bringing discount brokerage to commercial real estate also.)

With this in mind, I recommend that commercial brokerage companies watch themselves as they continue developing technologically in the future. While a national online listing system that showcases almost every listing in every market will have its advantages, giving this data away for free to everyone can also be costly to the industry.

Agents work hard for their money, and with the downward pressure on commissions already coming from owners, investors, and developers, creating a system that may easily add to this downward pressure would simply be bad for both agents and their companies. And once the public gets used to a system like this and loves it, and the regulatory agencies are willing to fight to keep it this way, you've opened up a can of worms that you would never, ever want to deal with. Just ask the people who are currently dealing with the DOJ and FTC on the residential side of the business.

Unfortunately, there are a lot of people out there who love driving real estate brokerage commissions downwards. And if they can do it on their own both legally and morally, they're entitled to do this. But helping them is simply ridiculous.

Just as the public cannot demand that wholesalers sell to them directly and undercut the prices of retail business establishments, real estate agents should not be obligated to work hard to provide the public with a system that economically boomerangs and comes back to hurt the agents themselves.

Published: June 16, 2005

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Jim Gillespie, Ph.D., is America's Premier Real Estate Coach℠. He has over 20 years of experience in real estate sales and is a past president of three different real estate companies. His FREE real estate E-newsletter with tips and creative ideas to help agents make more money is now read by over 35,000 agents nationwide. You can subscribe to his FREE E-newsletter by visiting RealEstateSalesCoach.com or contact him at Jim@RealEstateSalesCoach.com.